Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on SIEMENS AG-REG. We currently have 23 research reports from 1 professional analysts.
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Beating expectations and guidance raised!
01 Feb 17
In Q1 16/17 ending in December, revenues increased marginally by 1.2% to €19.12bn. The order intake, however, declined by 14.2% from €22.8bn to €19.5bn and the order backlog reached €115bn. The book-to-bill ratio is still hovering at around 1.02. The decline in order intake was due to large orders booked in Q1 15/16. Base orders remained stable. EBIT jumped 25.9% to €2.24bn and the EBIT margin increased from 9.4% to 11.7%. Net income increased 24.8% to €1.9bn. Eight out of the nine divisions were within the profit target range.
Digitalisation has been a must-have option for years!
08 Dec 16
Siemens presented its digital business on the innovation day. According to the company, total generated digital revenues grew 12% and reached €4.3bn. Around €3.3bn is software revenues and €1bn service revenues. The company employs over 17,500 software developers or 5% of the total workforce. The digital business contributed 5.4% to total revenues and is cross functional. The main digital activities are located in the Digital Factory division which generated total revenues of around €10.2bn, mainly with PLM software solutions. Assuming a similar cost structure as the software industry, the EBIT margin should range between 16% and 17%, which is a little higher than the EBIT margin of the Digital Factory division (15.3%). The acquired company Mentor Graphics will contribute an additional €1.1bn to the “Digital Factory” in the financial year 2016/17. Siemens is promoting the cloud-based and open operating system for the Internet of Things MindSphere. MindSphere will work as a platform between software and service solutions and electrification and automation.
Mentor Graphics, a perfect but expensive match
14 Nov 16
Siemens acquired Mentor Graphics for an enterprise value of US$4.5bn, or US$37.25 per share, in cash. Based on the closing price of 11 November, Siemens paid a premium of 21%. The closing of the deal is expected in Q2 16/17 (end of March). Mentor Graphics will be part of the PLM software business and integrated into the Digital Factory division. The valuation of the company is quite ambitious. Siemens is paying EV/Sales (2017E) 3.7x, EV/EBITDA 23.1x and EV/EBIT 34.3x. Siemens’ management could have bought the company earlier. In January 2016, the share priced collapsed 36.5% to US$17.43. Before the acquisition price was announced, the share price had again reached all-time high levels. Around 99.24% of the shares is owned by institutional investors, of which around 17% are hedge funds. Elliot Management, which owns 8% of the company, has already agreed to support the transaction.
Exceeding twice-raised guidance
10 Nov 16
In Q4 16 ending in September, revenues increased by 2.9% to €21.9bn. Profit from the so-called industrial business reached €2.45bn (market estimates €2.41bn). EBIT grew 9.8% to €1.79bn and the EBIT margin improved from 7.6% to 8.2%. Net income increased 20.1% to €1.15bn. Order intake however declined 14% to €20.3bn mainly due to large orders in Q4 15 (windpower of around €1.2bn and a large power & gas order in Egypt). Base orders even increased marginally in Q4 16. The book-to-bill ratio reached 0.93x. In the financial year 2015/16, revenues increased 5.3% to €79.6bn and the order intake rose 5% to €86.48bn. The book-to-bill ratio reached 1.09x. Net income declined 25.2% to €5.45bn but excluding the income from the sale of the hearing aids business and the joint venture with Bosch (BSH), net profit remained stable. Management proposed a dividend increase of €0.10 to €3.60 per share. The guidance for 2016, which was raised twice, was exceeded.
Return on equity reduced by law
13 Oct 16
In Germany, the regulatory environment for the grid network has changed. The German Network Agency (Bundesnetzagentur) has changed the imputed return on equity which will apply for the next five years. The current regulatory periods for gas and electricity will expire in 2017 (gas) and 2018 (electricity). The new regulations for gas will apply as of January 2018 and for electricity 2019. The new return on equity for new assets will be reduced from 9.05% to 6.91% and for so-called old assets (activation prior January 2006) will decline from 7.14% to 5.12%. In each case without inflation and before corporate tax and after trade tax. According to estimates the lowered return on equity (equity ratio 40% max.) will reduce the yield by around €650m per year.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management